Americans wagered $125B on sports in 4 years since legalization

ATLANTIC CITY, N.J. (AP) — In the four years since a U.S. Supreme Court ruling cleared the way for wagering in all 50 states, Americans have wagered more than $125 billion on sports through legal gambling outlets .

On the Saturday anniversary of the decision in the case filed in New Jersey, two-thirds of the country’s states have legalized sports betting.

In just four years, the industry has made its way into the daily lives of millions of Americans — from those who invest heavily for a certain outcome, to those who watch TV broadcasts at odds, to those who People struggling with gambling problems.

You don’t have to be a gambler — or even a sports fan — to be affected: a tsunami in the advertising industry is almost inevitable, especially on TV and radio, but also in other media. For example, FanDuel is the official odds provider for the Associated Press.

On May 14, 2018, the Supreme Court ruled that a case that began 10 years ago in New Jersey was the longest long throw: an attempt to overturn a federal law, the Professional and Amateur Sports Protection Act, that would restrict sports betting. It was legalized in four states before a 1991 deadline.

Now-retired state Senator Ray Lesniak, who filed the first federal lawsuit on the issue, said he acted to fund states, provide consumer protections and entice consumers. Experienced European bookmakers expanding into the US – all of which he says has come true.

“I made a good bet for New Jersey and America,” he said figuratively. (Lesniak also made his state’s first legal sports bet, correctly picking France to win the World Cup, winning $400 with a $50 bet at 8-1 odds.)

“When PASPA was repealed, I don’t think any of us could have imagined how big (the industry) would be in just four years,” said Karol Corcoran, general manager of online sports betting at FanDuel.

Matt Kalish, president and co-founder of DraftKings, said: “I got into this industry because I’ve always been the kind of kid who likes to predict things, compete with friends and make predictions. For those who like to do it That said, sports betting has become the number one thing by far.”

To get an idea of ​​just how much $125 billion is, consider this: That’s slightly more than the nation spent last year on pet food, supplies and veterinary care, and more than the net income of U.S. farmers last year.

Of course, most of the money goes to the person who wins the bet. Sportsbooks typically keep less than 10% of the total wagers they process after fees. In the first four years of legal gaming, they made $8.8 billion in revenue, according to the American Gaming Association, the national trade group for the gaming industry.

A major reason for the push to legalize sports betting is to protect customers from unlicensed bookmakers, many of which are part of organized crime. State regulations include strong consumer protections, and regulators are ready to strike if they find violations.

But legalizing sports betting has not succeeded in eradicating illegal gambling. Take a look at any of the many sports betting Facebook groups where unlicensed books from other countries hawk their products; on Wednesday, an aggrieved bettor complained that after he won a big bet, he asked His bookmaker paid him, only to have the man disappear.

Sports betting has been and remains a new source of tax revenue for state legislators, a particularly enticing option in the financial age. According to the AGA, it has generated $1.3 billion in state and local taxes since 2018, but many states have retained a drop in the bucket compared to the overall budget. Some states, such as New York, impose a 51% tax on mobile sports betting revenue — a rate that operators say is unsustainable in the long run.

According to the AGA, as of Friday, 35 states and Washington, D.C., have legalized sports betting, with 30 of those states already operating. (Kansas Gov. Laura Kelly signed a bill Thursday in her state). The competition measure will come on the ballot in November in a state that has long been the holy grail of sports betting: California, where a spat between tribal casinos and commercial gambling companies has made potential outcomes unclear.

Turn on the TV and no matter what you’re watching, there’s a good chance you’ll be bombarded with sports betting ads. FanDuel, DraftKings, BetMGM, PointsBet, Bet365 and especially Caesars Entertainment are broadcasting their sports betting offerings.

In December, American Gaming Association president and CEO Bill Miller called the level of sports betting advertising “an unsustainable arms race.” In some quarters, there have been calls for the industry to voluntarily self-regulate advertising to stop the possibility of the type of strict government regulation that exists in the UK.

Lawmakers in Massachusetts are already considering banning sports betting ads immediately before, during and after live sports events. New Jersey Congressman Ralph Caputo, himself a former casino marketing executive, said “the over-marketing in this industry is obscene.”

DraftKings president Kalish said the current level of advertising is necessary for “customer onboarding,” comparing it to that of other new products such as cryptocurrencies.

“I don’t think it’s necessarily a forever state,” he said of the current level of advertising.

FanDuel’s Corcoran said the company is comfortable with current levels of advertising, noting that “the industry is still in growth mode.”

The United States spent $292 million on sports betting ads in 2020, Felicia Grondin, executive director of the New Jersey Commission on Compelled Gambling, cited a Barron’s report. A year later, it had grown to $725 million.

Grondin said that with increased exposure and greater access to betting on mobile phones (more than 80% of sports betting in the U.S. is made this way), more and more people are seeking sports betting-related Help with gambling problems.

In 2018, the New Jersey State Legislature’s 1-800-GAMBLER telephone helpline received 9,490 calls, 5% of which were primarily due to sports betting issues. By 2021, the line received 23,977 calls, 23% of which involved sports betting.

“It’s disturbing, it’s worrying, and it’s getting worse every day,” Grondin testified before New Jersey lawmakers this week. “It’s easy to gamble today. You can pull out your phone and sit on the couch.”

Four years ago, sports bettors had few options, including predicting the outcome of a game or player performance before the event began. Since then, the potential wager, or “market,” has exploded, largely due to a surge in in-game wagering, where gamblers can react to events as the game unfolds and place their bets accordingly. It has become the fastest growing segment of the fast-growing industry. Many sportsbooks now offer and encourage multi-event wagering called parlays with free bets or refunds for lost bets.

While more established sportsbooks are looking to increase their market share, the amount of capital required to enter and compete in the industry continues to grow, so much so that executives at many leading companies say they expect some smaller competitors to either merge , or go out of business.

FanDuel’s Corcoran said the immediate future is to grow the industry and its individual companies.

“We’re lucky to have access to about 38 percent of the U.S. population,” he said. “But there are still millions of people who don’t have legal sports betting. We want to be able to do business where they are.”

Copyright © 2022 The Washington Times, LLC.



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